China sourcing glossary
What Is a Proforma Invoice (PI)? Is It a Contract in China?
What is a proforma invoice?
A PI is the seller's own document. It usually lists the product and model, the quantity, the unit price and currency, the trade term, the lead time, the payment terms and the bank account to pay into. Chinese suppliers send one to confirm a quotation, to ask for a deposit, or to give you a document for your bank or customs broker.
A PI is not a Chinese tax invoice (fapiao). It isn't the commercial invoice that goes with the shipment either. It comes first, before anything has been paid or made.
Is a proforma invoice a binding contract in China?
It can be. Under the Civil Code, a contract can be made by offer and acceptance, or in other ways (art. 471). A PI that sets out the goods, quantity and price, and shows the supplier means to be bound if you accept, works as an offer (art. 472). You can accept by saying so, or by conduct where that is how the two of you deal, such as paying the deposit (art. 480). And if one side performs its main obligation and the other accepts it, a contract exists even though nobody signed (art. 490).
Three things follow:
- A chop is not the test. Paying against a PI can bind both sides without a stamp or signature.
- A PI can stay a quotation. One marked "subject to final confirmation", or missing key terms, may bind nobody.
- Changing it starts again. If you reply with changes to the goods, quantity, quality, price, delivery, liability or dispute terms, your reply is a new offer, and the PI lapses (art. 488). The question then is which version the supplier accepted.
Which documents decide what you agreed?
Rarely the PI alone. A typical order looks like this: the PI fixes price and quantity, a separate spec sheet sets the quality, and your payment email adds a condition. A court reads them together, along with what each side did next. If they disagree and nothing says which one controls, each side will rely on the version that suits it.
So before you pay, put the documents in one place and confirm one set of terms with the supplier. If a requirement lives only in an old email or chat, either get the supplier to confirm it or move it into an annex that both sides sign.
These examples are based on matters I have handled. Names, products, places, dates, amounts and other identifying details have been removed or changed. They show the kind of work involved. They don't promise any result.
Acting for a buyer
Paid against a PI, with the quality terms left in old emails
A buyer had paid the first instalment against a supplier's PI, while the quality requirements sat in earlier emails. I went through those emails and their attachments, and separated what the supplier had clearly confirmed from what only the buyer had asked for. The terms that mattered went into one annex, with the open points listed for the supplier to answer in a single reply. Once both sides confirmed the annex, production went ahead on the revised documents.
What should you check on a PI before you pay?
- The seller. Its full Chinese registered name, matching the contract and the name on the bank account. If the PI asks you to pay a different company, read what to do when the payee is not the supplier first.
- The goods. Model and specification, and the drawing, spec sheet or approved sample they refer to, with its version or date.
- Quantity, unit price, currency and total.
- The trade term. With a named place and the Incoterms version, for example "FOB Ningbo, Incoterms 2020".
- The lead time. And which event starts it: payment, sample approval or something else.
- The payment terms. What triggers each payment, as well as the split, such as 30/70.
- Inspection. How you check the goods, and what happens if they fail.
- Which document wins. If the PI and a contract or spec sheet disagree, which one controls.
If most of these are missing, a PI is thin protection for anything beyond a small, standard order. For machines or larger orders, a purchase contract sets out inspection, warranty and disputes.
Questions from overseas buyers
Does paying the deposit mean I accepted everything in the PI?
It can. If the PI was a firm offer and you paid without objecting, your payment can count as acceptance (Civil Code art. 480). If you want different terms, say so in writing before you pay, and get the supplier's written confirmation.
Does a PI need the supplier's company chop to be binding?
No. A contract can be made by acceptance or by performance, without a stamp (arts. 480 and 490). A chop still helps you prove which company issued the PI, so check that the name on it matches the seller.
Is a proforma invoice the same as a commercial invoice?
No. The PI comes before payment and production. The commercial invoice is issued when the goods ship and is used for customs clearance and payment. If the two show different sellers, prices or quantities, ask why before you pay the balance.
I draft purchase contracts for overseas buyers of standard products from China →
Sources and translations
- Civil Code of the PRC (2020), arts. 471, 472, 480, 488 and 490.
Translations are mine and unofficial.
Official texts cited in this article.
- Civil Code of the PRC (2020) npc.gov.cn
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